Alliance Capital Management agrees to settlement with state

State Attorney General Eliot Spitzer has reached an agreement with Alliance Capital Management Holding that requires the mutual fund company to reduce management fees by 20 percent for the next five years.

Spitzer's spokesman Darren Dopp said that details of the settlement will be announced Dec. 18.

The settlement between Alliance and Spitzer's office requires management fees to be reduced by $70 million annually over the next five years. The agreement also requires Alliance to hire a special officer to guarantee that shareholder expenses are reasonable.

Spitzer has gone after the mutual fund industry for irregularities and illegal actions which he says have cost small shareholders money.

Capital Management, which has its headquarters in New York City, primarily serves institutional investors, and is one of the largest investment managers in the world.